Administration misses deadline for oil, gas lease sale
CASPER — Wyoming will not see a federal oil and gas lease sale in the first quarter of 2022.
The Bureau of Land Management (BLM) told producers last year that it would “offer 195 parcels totaling about 179,001 acres in an oil and gas lease sale in the first quarter of calendar year 2022,” in accordance with a June court order directing it to resume quarterly lease sales.
But federal law requires the agency to announce a sale at least 45 days before it is held. The first quarter of 2022 ends on Mar. 31, and that 45-day window closed this week.
“The Biden administration continues to defy the courts and the law,” Sen. John Barrasso, R-WY, said in a Wednesday statement. “The BLM has blown past a critical deadline required to hold the first federal onshore oil and gas lease sale this year. As a result, Wyoming and other Western states will now miss oil and gas lease sales for the fifth quarter in a row.”
Industry in Wyoming, the No. 1 natural gas producer and No. 2 oil producer on federal lands, has become increasingly frustrated as quarter after quarter passed without any leases sold. The state’s last federal sale occurred in December 2020 under then-President Donald Trump, but even those December leases have yet to be issued.
Pete Obermueller, president of the Petroleum Association of Wyoming, warned that the ongoing delays would have “tangible negative impacts” in the state.
“You would think,” Obermueller said in a Wednesday statement, “in light of rising gas prices, rampant inflation and global instability the President would do everything in his power to unleash America’s natural resources — spurring the economy and reinforcing our national security in the process.”
The BLM has not said publicly why the sale was delayed. A preliminary injunction issued Friday by a federal judge in Louisiana, barring the Biden administration from using the social cost of carbon in decision-making, may explain it.
An environmental assessment of Wyoming’s candidate parcels included the social cost of carbon, a climate change consideration defined by the BLM as “estimates of the monetized damages associated with incremental increases in (greenhouse gas) emissions in a given year.” The agency had planned to weigh those costs as it finalized its lease offerings.
Ten of the nation’s biggest energy producers, including Wyoming, filed for the preliminary injunction.
Evaluating for the social cost of carbon, the 44-page ruling read, “will directly harm Wyoming, the largest net energy supplier in the nation and a major producer of coal, natural gas, and oil.”
It’s been a turbulent two years for Wyoming’s oil and gas industry, which has often cited uncertainty, caused in part by changing federal policies, to explain its slow return to pre-pandemic production.
According to Shannon Anderson, staff attorney for the Powder River Basin Resource Council, the court rulings have left the federal government also navigating a shifting regulatory environment.
“I think that there’s just a lot of uncertainty right now over the oil and gas program, not necessarily caused by the administration and actually caused by all the litigation that’s going on from industry and pro-industry states,” Anderson said.
She suspects the agency “is just taking the right time to make sure the decision is defensible — that it does everything it’s supposed to do.”
The Petroleum Association isn’t sure what’s delaying the leases, either. But Communications Director Ryan McConnaughey doesn’t think the preliminary injunction alone can explain it. He believes the BLM should’ve been able to reevaluate the leases in time.
When federal leases aren’t sold, the Petroleum Association said in Wednesday’s statement, the state misses out on needed revenue.
Wyoming earned more than $29 million from federal lease sales in 2019, before the pandemic curbed new development. The industry group estimates that the state has lost more than $47 million from the five consecutive quarters without lease sales.
This story was published on Feb. 17.